Chapter Ins 50
ANNUAL AUDITED FINANCIAL REPORTS, ANNUAL FINANCIAL
STATEMENTS AND EXAMINATIONS
Subchapter I — Annual Audited Financial Reports
Ins 50.03 Filing by exempt foreign and alien insurers. Ins 50.04 Authority to obtain information or examine not restricted. Ins 50.05 General requirements related to filing and extensions for filing of annual audited financial reports and audit committee appointment. Ins 50.06 Contents of annual audited financial report. Ins 50.07 Designation of independent certified public accountant. Ins 50.08 Qualifications of independent certified public accountants. Ins 50.09 Consolidated or combined audits. Ins 50.10 Scope of audit and report of independent certified public accountant. Ins 50.11 Notification of adverse financial condition. Ins 50.12 Communication of internal control related matters noted in an audit. Ins 50.13 Accountant’s letter of qualifications. Ins 50.14 Availability and maintenance of CPA work papers. Ins 50.15 Requirements for audit committees. Ins 50.155 Internal audit function requirements. Ins 50.16 Conduct of insurer in connection with the preparation of required reports and documents. Ins 50.17 Management’s report of internal control over financial reporting. Ins 50.18 Exemptions and effective dates. Ins 50.19 Canadian and British companies. Subchapter II — Annual Financial Statements
Ins 50.20 Insurers to file annual financial statements. Ins 50.25 Insurers to file with the national association of insurance commissioners. Ins 50.30 Actuarial opinion required. Subchapter III — Examinations
Ins 50.55 Examination of foreign and alien insurers. Subchapter IV — Actuarial Opinion
Ins 50.65 Actuarial opinion required. Ins 50.68 Reliance on actuary opinion. Subchapter V — Actuarial Opinion and Memorandum Regulation
Ins 50.75 General requirements. Ins 50.76 Required opinions. Ins 50.78 Statement of actuarial opinion based on an asset adequacy analysis. Ins 50.79 Description of the actuarial memorandum including an asset adequacy analysis and regulatory asset adequacy issues summary. Subchapter VI — Risk Retention and Purchasing Groups
Ins 50.85 Risk retention groups and risk purchasing groups. Ch. Ins 50 NoteNote: Chapter Ins 50 was created as an emergency rule effective March 12, 1993. Ins 50.01Ins 50.01 Definitions. In this chapter: Ins 50.01(1g)(1g) “Affiliate” of, or person “affiliated” with, a specific person means a person that directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified. Ins 50.01(1r)(1r) “Audit committee” means a committee or equivalent body established by the board of directors of an entity for the purpose of overseeing the accounting and financial reporting processes of an insurer or group of insurers, the internal audit function of an insurer or group of insurers, and audits of financial statements of the insurer or group of insurers. The audit committee of any entity that controls a group of insurers may be deemed to be the audit committee for one or more of the controlled insurers solely for the purposes of this chapter at the election of the controlling person under s. Ins 50.15 (6). If an audit committee is not designated by the insurer, the insurer’s entire board of directors shall constitute the audit committee. Ins 50.01(2)(2) “Audited financial report” means a financial report prepared and conforming to s. Ins 50.06. Ins 50.01(3)(3) “Executive officer” means any individual charged with the active management and control in an executive capacity of a person, whether incorporated or unincorporated and includes, but is not limited to, a chair of the board, president, vice president, treasurer, secretary, controller, and any individuals performing similar functions. Ins 50.01(4g)(4g) “Group of insurers” means those licensed insurers included in the reporting requirements of ch. 617, Stats., or a set of insurers identified by the insurers’ management or controlling person for the purpose of assessing the effectiveness of internal control over financial reporting. Ins 50.01(4m)(4m) “Indemnification” means an agreement of indemnity or a release from liability where the intent or effect is to shift or limit in any manner the potential liability of the person or firm for failure to adhere to applicable auditing or professional standards, whether or not resulting in part from knowing or other misrepresentations made by the insurer or its representatives. Ins 50.01(5)(5) “Independent certified public accountant” means: Ins 50.01(5)(a)(a) An independent certified public accountant, or independent accounting firm, in good standing with the American institute of certified public accountants and in all states in which the accountant or firm is licensed, or required to be licensed, to practice; or Ins 50.01(5)(b)(b) For Canadian and British companies, a Canadian chartered or British chartered accountant. Ins 50.01(6g)(6g) “Internal audit function” means a person or persons who provide independent, objective, and reasonable assurance designed to add value and improve an organization’s operations and accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. Ins 50.01(6m)(6m) “Internal control over financial reporting” means a process effected by an entity’s board of directors, management and other personnel designed to provide reasonable assurance regarding the reliability of financial statements, including the items specified in s. Ins 50.06 (2) (b) to (3), and includes those policies and procedures that: Ins 50.01(6m)(a)(a) Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of assets; Ins 50.01(6m)(b)(b) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements, including those items specified in s. Ins 50.06 (2) (b) to (3), and that receipts and expenditures are being made only in accordance with authorizations of management and directors; and Ins 50.01(6m)(c)(c) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the audited financial statements, including those items specified in s. Ins 50.06 (2) (b) to (3). Ins 50.01(7)(7) “Policyholder surplus” means capital and surplus. Ins 50.01(7d)(7d) “SEC” means the United States Securities and Exchange Commission. Ins 50.01(7h)(7h) “Section 404” means section 404 of the Sarbanes-Oxley Act of 2002 and the SEC’s rules and regulations promulgated thereunder. Ins 50.01(7p)(7p) “Section 404 Report” means management’s report on internal control over financial reporting as defined by the SEC and the related attestation report of the independent certified public accountant. Ins 50.01(7t)(7t) “SOX Compliant Entity” means an entity that either is required to be compliant with, or voluntarily is compliant with, all of the following provisions of the Sarbanes-Oxley Act of 2002: Ins 50.01(7t)(a)(a) The preapproval requirements of section 201, section 10 A (i), of the Securities and Exchange Act of 1934; Ins 50.01(7t)(b)(b) The audit committee independence requirements of section 301, section 10 A (m) (3) of the Securities and Exchange Act of 1934; and Ins 50.01(7t)(c)(c) The internal control over financial reporting requirements of Section 404, item 308 of SEC Regulation S-K. Ins 50.01(8)(8) “State of domicile” means the state where an insurer is domiciled or, for an alien insurer, its port of entry state. Ins 50.01(8m)(8m) “Ultimate controlling person” means a person who is not controlled by any other person. Ins 50.01(9)(9) “Work papers” means records kept by the independent certified public accountant of the procedures followed, the tests performed, the information obtained, and the conclusions reached pertinent to the independent certified public accountant’s examination of the financial statements of an insurer. “Work papers” include, but are not limited to, audit planning documentation; audit guides; work programs; analyses; memoranda; letters of confirmation and representation; abstracts of company documents; financial compilations, even if not produced during a full audit; and schedules or commentaries prepared or obtained by the independent certified public accountant in the course of examination of the financial statements of an insurer or which support the opinion of the independent certified public accountant regarding the financial statements. Ins 50.01 HistoryHistory: Cr. Register, July, 1993, No. 451, eff. 8-1-93; correction in (4) made under s. 13.93 (2m) (b) 7., Stats., Register, June, 2001, No. 546; CR 07-023: cr. (4m), Register September 2007 No. 621, eff. 10-1-07; CR 08-053: cr. (1g), (1r), (4g), (4r), (6m), (7d), (7h), (7p), (7t) and (8m) Register December 2008 No. 636, eff. 1-1-09; CR 17-015: am. (1r), cr. (6g) Register December 2017 No. 744, eff. 1-1-18; CR 22-075: am. (9) Register June 2023 No. 810, eff. 7-1-23. Ins 50.02Ins 50.02 Applicability. Unless otherwise ordered by the commissioner, this subchapter applies to all insurers except: Ins 50.02(1)(1) An insurer is not subject to this subchapter for a calendar year in which the insurer has: Ins 50.02(1)(a)(a) Direct premiums written in this state of less than $100,000 and less than 1,000 policyholders or certificate holders of directly written policies in the state at the end of the calendar year; and
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